Why You’ll Pay More for Home Care Workers

A Supreme Court decision changes the rules for families and agencies

Workers who come to families’ homes to help someone eat, get dressed or take medications must be paid the federal minimum wage and overtime following a U.S. Supreme Court decision on Oct. 6. The change in law took effect Oct. 13, but full enforcement won’t begin until Jan. 1, 2016.

Home care is one of the nation’s fastest growing, but low-paid, professions. There are 2 million home care workers and another 1 million will join the workforce by 2022, according to the New York City–based Paraprofessional Healthcare Institute (PHI), an advocacy group for these workers. The U.S. Department of Labor estimates that home care workers will get an additional $210 million a year under the new compensation rules.

But the exact figure is uncertain because many home care workers are hired directly by families, without the formal contracts set up by agencies when they send these workers out under federal or state programs. Now, families must keep records to show that they’re fulfilling pay requirements, said Deborah Chalfie, senior legislative representative for financial security and consumer affairs at AARP.

“Most families who utilize paid home care workers have never had to deal with any of these questions before, because home care workers were not covered by the federal minimum wage and overtime law,” said Chalfie.

Home Care Is a Broad Category

The average hourly pay for a home care worker is $9.61, according to PHI. That’s already more than the federal minimum wage of $7.25. But not all home care workers are paid the average wage or even the federal minimum. And “very few” are employed full-time, according to a briefing prepared by PHI, which says that “the result is median annual earnings of just $13,000 a year.”

For families, one challenge in meeting the new home care pay rules will be recognizing who qualifies for them. The home care category includes home health aides, personal care assistants, certified nursing assistants and others.

Mollie Murphy, a consultant to the National Resource Center for Participant-Directed Services at Boston College, which helps state agencies and others that work with people with disabilities, offered an example of the range of paid caregivers covered by the Supreme Court decision:

Now, families must keep records to show that they’re fulfilling home care pay requirements.

— Deborah Chalfie, AARP

“‘Frank’ has a physical disability. He needs assistance getting into and out of bed, bathing, making his meals and [doing] some light household duties, like laundry,” Murphy said. “His nephew, Sam, comes in the morning before Frank goes to work and his neighbor, Sally, comes around 6 p.m. each day. Sam and Sally each work about two hours each day and Frank pays them $6 an hour.”

Based on the Supreme Court decision, Frank has to pay his nephew and his neighbor $7.25 an hour, Murphy said. His weekly expense goes up $35.

If Frank’s helpers or any home care worker puts in more than 40 hours a week, that person must be paid time-and-a-half for overtime, Murphy said. A personal care attendant making $10 an hour for 60 hours a week would see a bump in weekly pay from $600 to $700.

Winners and Losers?

The Department of Labor (DOL) has discretion beginning on Nov. 12 to investigate whether the law is being followed.

“The Labor Department won’t be going into every home to find out how they are paying the aide,” Deane Beebe, media relations director for PHI, said in an e-mail. “However, once the enforcement period begins, if an aide feels that she is not being paid according to the federal law, she can report it to DOL in her state and have the law behind her.”

Katherine Murray, Murphy’s colleague at the National Center for Participant-Directed Services, said she expects the new pay rules to stabilize the home care workforce and reduce turnover. She called that “a huge win for workers as well as for the people to whom they provide services.”

But while increased pay could motivate home care workers to stay on the job, the change could also give home care agencies an incentive to cut workers’ hours. As a result, some home care workers could see a net loss in pay.

“We have strong evidence that the industry will shift toward workers whose hours are capped at 40 and part-time workers in order to minimize additional overtime costs,” Murray said.

No Longer ‘Elder Sitters’

Better pay will “communicate that society respects caregiving, not as ‘glorified babysitting,’ but as an important profession,” Robyn Grant, director of public policy and advocacy for the National Consumer Voice for Quality Long-Term Care, a Washington–based resource center for long-term care ombudsman programs, said in an email.

Historically, home care workers were viewed as something like babysitters. In 1974, federal law was changed to apply minimum wage and overtime rules to domestic workers. But there “was a ‘companionship services’ exemption for ‘elder sitters’,” according to a DOL statement. That term meant people “whose primary responsibility was to watch over an elderly person or person with an illness, injury, or disability in the same manner that a babysitter watches over children.”

Since then, home care has undergone a dramatic transformation, and more people are being cared for at home by workers who “perform increasingly skilled duties,” the DOL said.

A companionship exemption still exists in the new pay rules for home care workers.

PHI offers a fact sheet for implementing the rules, and says companionship is narrowly defined as conversation, pastimes, or accompanying someone on errands or to appointments. When 20 percent or more of a companion’s time is spent on care, especially help with basic activities of daily living, companionship becomes home care and the new compensation rules apply.